Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-25T07:10:19.841Z Has data issue: false hasContentIssue false
  • English
  • Français

The System of Financial Supervision in Europe – Origin, Developments and Risk of Overruling

Published online by Cambridge University Press:  20 January 2017

Margherita Poto
Get access Rights & Permissions [Opens in a new window]

Abstract

The article depicts the general framework in which the regulatory bodies in financial sector have been operating. After an introductory outline of the financial system and its objectives, the analysis shifts to the framework of the financial business operators and of the regulatory bodies. The market is organised and fragmented in financial conglomerates, where cross activities take place and where potentially it is easier for the regulatory bodies to exercise their control. In this context, the different models of supervision will be scrutinised, together with the attempts, made at European level, to comply with the international standards. The final part is dedicated to the description of global dynamics and to the current situation to overcome the systemic crisis affecting the market. With some –bitter – concluding remarks we will try to prospect possible different solutions to the crisis, solutions that don't necessarily coincide with the actual decisions to reform the system taken at European level.

Type
Research Article
Information
European Journal of Risk Regulation , Volume 2 , Issue 4 , December 2011 , pp. 491 - 504
Copyright
Copyright © Cambridge University Press 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Parts of the following analysis are an updated version of Chapter II, Margherita Poto, Financial Supervision in Comparative Perspective (Intersentia, Antwerpen-Oxford-Portland, 2010), at pp. 29–48.

2 Dettori, S., Zito, A., “Risparmio (tutela del)”, in Chiti, Mario P. and Greco, G. (eds), Trattato di diritto amministrativo europeo, Vol. III, 2nd. ed. (Milan, 2007), at p. 1732Google Scholar; see also Montedoro, Guido, “Le amministrazioni indipendenti e la vigilanza sui mercati finanziari”, in 10 Foro amm. CdS (2004), at p. 2998 Google Scholar.

3 Forestieri, Guido, Mottura, Paolo, Il sistema finanziario. Istituzioni, mercati e modelli di intermediazione, 2nd. ed., (Milan, 2000)Google Scholar; see also Jan H. Dalhuisen, “Financial Services, Products, Risks and Regulation in Europe after the EU 1998 Action Plan and Basle II”, in EBLR (2007), p. 819.

4 Entretien de la COB 2002, Bull. COB, n. 373, 2002, 3.

5 Valette, Jean-Paul, “La régulation des marchés financiers”, in Revue du droit public (2005), p. 184 Google Scholar: “Sa référence fait parfois craindre un concept mystérieux, fourre-tout et catalogué, mais elle s’impose chaque jour davantage. La régulation a été définie récemment par le Conseil économique et social français comme l’exercice d’une relation pacifiée entre les acteurs économiques, s’appuyant sur une autorité reconnue, permettant de surmonter les conflits d’intérêts. En matière économique et financière, elle peut se réduire à trois paramètres: une intervention fondamentalement publique (mais indépendante du gouvernement), une action sur un ou plusieurs marchés, la création d’un cadre loyal et sécurisé de concurrence.” Ibid., Le service public à la française (Ellipses, 2000), p. 158

6 Enriques, Renzo Costi- Luca, “Il mercato mobiliare”, in Cottino, Gastone (ed.), Trattato di diritto commerciale (Padova: 2004), Vol. VIII, at p. 7 Google Scholar.

7 FSA Occasional Paper, The Economic Rationale for Financial Regulation (1999), n. 1, at p. 22.

8 Segni, Antonio, “I mercati e i valori mobiliari”, in Cassese, Sabino (ed.), Diritto amministrativo speciale, III, Finanza pubblica e privata. La disciplina dell’economia (Milan: 2003), at p. 2187 Google Scholar.

9 OJ 11 June 1993, n. 141/27.

10 Amtenbrink, Fabian, The Democratic Accountability of Central Banks. A Comparative Study of the European Central Bank (Oxford and Portland, Oregon: 1999), at p. 34 Google Scholar.

11 Lannoo, Karel, “Supervising the European Financial System”, in Cecchini, P., Heinemann, F., Jopp, M. (eds), The Incomplete European Market for Financial Services (Heidelberg: 2003), at p. 232 Google Scholar: “The exercise of banking supervision under the roof of the central bank was seen a barrier towards a more overall integrated supervision of financial sector as a whole […]. Norway integrated bank and insurance supervision in 1986, followed by Denmark in 1988 and Sweden in 1992. The most exemplified, however, was the creation of the UK Financial Services Authority (FSA) in May 1997, which regrouped 7 different financial sector supervisory authority. The German FSA, the Federal Agency for Financial Market Supervision, was proposed in January 2001 and formally started in May 2002, although some important exceptions remain, such as leaving the supervision of securities markets in the hands of the Länder. Moreover, the German structure will remain decentralised for some time to come, which raises question about its operational effectiveness. The FSA in Austria started to function in April 2002. In Belgium and Ireland, financial supervision will be integrated under the aegis of the central bank”.

12 Karel Lannoo, “Supervising the European Financial System”, supra note 11, at p. 234: “A Leviatan supervisor could create the perception that the whole financial sector is secure. It may reduce the incentives for providers to prudently manage their business, and for users to carefully choose their financial services’ provider, the so called moral hazard”.

13 Ibid., at p. 231: “It has been argued that the crucial thing is not whether all the functional supervisors are under a single roof, but whether they communicate with one another. This is not a simple task, if one images that the British FSA employs about 2000 persons. If an integrated supervisor is no more than a combination of banking, insurance and investment business divisions, the full benefits of a single regulatory authority will not be achieved”.

14 Tommaso Padoa Schioppa, “Securities and banking: bridges and walls”, Lecture at the London School of Economics, London, 21 January 2002, available on the Internet at <http://www.ecb.int> (last accessed on 21 October 2011).

15 Giovanni Sabatini, La vigilanza sugli intermediari e sui mercati, at p. 454.

16 Ibid., at p. 455.

17 Rainer Nickel, European Governance and European Administrative Law: New Legal Benchmarks for the New European Public Order, EUI Working Papers, Law No 2006/26.

18 Sauer, Stephan, Sturm, Jan-Egbert, “Using Taylor Rules to Understand European Central Bank Monetary Policy”, 8(3) German Economic Review (August 2007), at pp. 375–398 CrossRefGoogle Scholar.

19 Today TFEU 127.

20 Malatesta, Alberto, La Banca Centrale Europea. Gli aspetti istituzionali della banca centrale della Comunità Europea (Milano, 2003), p. 74 Google Scholar; see also Siclari, Domenico, Costituzione e vigilanza bancaria (Italy: Wolters Kluwer, 2007)Google Scholar.

21 Follak, Klaus Peter, International Harmonization of Banking Supervision and Regulation, in Weber, A. (ed.), Währung und Wirtschaft (2000), at p. 379 Google Scholar.

22 While writing the article, the whole package on financial regulation and supervision has been adopted and published in OJ L331/1, December 15, 2010; see in particular Regulation 1092/2010/EU, Regulation 1093/2010/EU, Regulation 1095/2010/EU and Regulation 1096/2010/EU all adopted on November 24, 2010.

23 Niamh Moloney, The Lamfalussy legislative model: a new era for the EC securities and investment services regime, in International and Comparative Law Quarterly (2003), at p. 509.

24 Ibid., at p. 518.

25 De Bellis, Maurizia, “Gli standards globali per i servizi finanziari. Concorrenza e reciproco rafforzamento tra diversi modelli di amministrazione globale”, in Cassese, Sabino, Ponticelli, Martina (eds), Diritto e amministrazioni nello spazio giuridico globale, in Quaderni della Rivista trim. di diritto pubblico (Milan: 2006), at p. 155 Google Scholar.

26 Antonella Sciarrone Alibrandi, “La sorveglianza sui sistemi di pagamento: evoluzione morfologica, strumenti e limiti”, in Banca borsa tit. cred. (2004), at p. 447; Hugo J. Hahn, “The European Central Bank: key to European Monetary Union or Target?”, in Common Market Law Review (1991), at p. 800.

27 Michael S. Barr and Geoffrey P. Miller, Global Administrative Law: The View from Basel, European Journal of International Law (2006), at p. 17.

28 Ibid., at p. 18.

29 Ibid., at p. 27: “The Basel Committee has become more accountable over time. The process resulting in the Capital Accords of 1988 were characterized by closed meetings with little or no transparency. Negotiations were conducted without public input, and the final rule was announced […] as a ‘fait accompli’. Domestic implementation in the United States and in the European Union accrued without much additional process. But by time of negotiations over the second accord, Basel, had begun to open up, in part as a response to financial institution pressure for greater transparency and in part because of substantive concerns with first accord had helped to galvanize a debate over new global rules”.

30 Isaac, William M., “Somebody Must stop the Runaway Train Basel II”, American Banker (2005), at p. 2A Google Scholar.

31 For further details, see the Internet at <http://www.bis.org/publ/bcbs134.htm> (last accessed on 21 October 2011).

32 Available on the Internet at <http://www.consilium.europa.eu/> (last accessed on 21 October 2011). For the updates see supra note 22.

33 On the reform see Jean-Claude Trichet, “Macro-prudential oversight and the future European Systemic Risk Board”, Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank at the European Banking Congress, Frankfurt am Main, 19 November 2010, available on the Internet at <http://bis.org/review/r101126b.pdf> (last accessed on 21 October 2011).

34 See Onado, Mario, “Is the Larosière Proposal on European Financial Regulation on the Right Path?”, in 45(1) The International Spectator, (March 2010), pp. 59–73 CrossRefGoogle Scholar.

35 In December 2010 all the Basel rules texts and results have been published, in this occasion it has been planned that all major G-20 financial centers commit to have adopted the Basel III Capital Framework by 2011. Available on the Internet at <http://www.bis.org> (last accessed on 21 October 2011).

36 Juvenal Satires VI 347-348: “pone seram, cohibes. sed quis custodiet ipsos custodes?”

37 In this regard, Jean- Claude Trichet compared the systemic risk to the wood of the English proverb. “You can't see the wood, if you are too focused on the trees.” See Clare Distinguished Lecture in Economics and Public Policy by Jean-Claude Trichet, President of the ECB organised by the Clare College, University of Cambridge, Cambridge, 10 December 2009, available on the Internet at <http://www.ecb.int/press/key/date/2009/html/sp091210_1.en.html> (last accessed on 21 October 2011).

38 Kindleberger, Charles P., Manias, Panics, and Crashes: A History of Financial Crises (Wiley, 2005), 5th editionCrossRefGoogle Scholar.

39 See Mario Onado, supra note 34, at p. 68.